American Powerhouse Builds Global Profile

General Electric Co. Vice Chairman
John Rice
travels to as many as 40 countries a year to manage business lines as diverse as jet engines, ultrasound machines and wind turbines.

Mr. Rice, 55 years old, moved to Hong Kong early last year to head global growth for one of the world's largest companies. He took the helm of GE's overseas operations at a time when the global economy was recovering from a recession, and GE's international presence was growing: In 2011, the non-U.S. businesses generated 53% of the company's $147.3 billion in revenue, compared with 50% of its $149.6 billion revenue in 2010.

In an interview, Mr. Rice, who has worked at GE for more than three decades, talked to Kathy Chu about the company's big bet on Asia, the challenges of getting into developing economies, and why he won't be challenging CEO
Jeff Immelt
for the top job anytime soon.

The following interview has been edited.

WSJ: As head of global growth for GE, you oversee 150 countries from Hong Kong. Why Hong Kong, and what does this say about GE's bet on Asia?

ENLARGE

John Rice
General Electric

Mr. Rice: Certainly, Asia is important, but so is the Middle East, Latin America, Africa. The fact that we're here and not somewhere in Latin America doesn't lessen the importance of Latin America. The important thing is that it had to be outside the United States so you could get that perspective, and the lens of being situated in a different market.

WSJ: GE has made a big bet on Asia, but it's also bet on resource-rich countries such as Australia, Peru and Canada. As economic growth in China and other parts of Asia slows, how does that affect GE's investment in the region?

Mr. Rice: We certainly are sensitive to, and react to, short-term shifts, but we also have to have a good hand on the rudder and make sure we are keeping a long-term view in mind. We're in long-cycle businesses, so whether orders are up or down in a specific quarter rarely should change our long-term strategy.

General Electric is banking on double-digit growth from the developing world. The WSJ's Deborah Kan speaks to GE Vice Chairman John Rice about company plans to steer through slower economic growth.

There's no question you have to respond to short-term challenges in a particular place and reduce costs or reallocate costs. That's part of what every responsible business does. You also have to balance that with a long-term strategy. If you're in one day and out the next, you're not going to be viewed as a good long-term partner.

The slowing Asian economies have not lessened the appetite for infrastructure. People still need power generation, health care, water, forms of transportation.

WSJ: GE set a goal of generating $10 billion in revenue in China by 2010, but that hasn't happened yet. Has it been harder to grow in China?

Mr. Rice: We began in China as a place to buy inexpensive components for appliances, for the products we were producing in other places. Then we started selling things in China, then we started looking at China as a place to manufacture. Now China is a place where we do all of those things, but growth is going to come more from the partnerships we create. These take longer to put together, and they're a little bit more complicated. We didn't really know what to expect.

WSJ: GE's expansion overseas has created a lot of jobs in other countries. How do you respond to the critics who say these jobs should be staying in the U.S.?

Mr. Rice: I don't understand the criticism. In our aviation business, we have 3,000 engines on operation on airlines based out of China, and much of the content comes from U.S. operations. There are thousands of jobs in the U.S. that exist because of our ability to participate in the Chinese aviation industry.

The critics seem to think you can pull all investments out from a market and still have unlimited opportunities to sell into that market. It doesn't really work that way.

If you want to participate in global markets, you have to be an investor. We need to do it in a way that's complementary. I want to create jobs in the U.S., too. I don't think that the global economy is going to be fully healthy unless we get the unemployment rate down in the United States. Too many people take job creation as a zero-sum game, and that's not the way it works.

WSJ: Is participating in the global markets a necessary part of doing business today?

Mr. Rice: Totally. If you want to participate in global markets, you have to create capacity and capability. You have to do it in ways that create a synergy with what you have going on in other places. You want to create a whole that's greater than the sum of the parts.

WSJ: GE is expanding in countries including Myanmar and Mongolia. What opportunities do you see in these countries, and what are the challenges?

Mr. Rice: You see in every place an emphasis on electricity. One of the things that governments want to do is show the population they can put more electricity on the grid, keep the lights on longer as a way to show people's lives are getting better. Any talk about a change in standard of living means nothing if you don't have electricity.

But bureaucracies aren't necessarily wired to go fast. There are concerns about corruption; there are a lot of challenges to the governmental decision-making process.

WSJ: What is your management style?

Mr. Rice: I have high expectations for myself and for people around me. I hold myself and people accountable, but I also want to be part of the solution. Part of being an effective leader is to be somebody who wants to help solve problems.

WSJ: You're one of three vice chairmen at GE. Any interest in the top job?

Mr. Rice: Jeff [Immelt] and I are about the same age. I love being part of the GE leadership team. I have no aspiration to another job at GE. I can't envision a circumstance under which I would be offered the [CEO] job.

WSJ: What is your vision for GE's global operations?

Mr. Rice: Our No. 1 priority is to help the company grow faster and more profitably.The challenge we have—and I think it's a similar challenge for most global companies—is to balance broad, deep global strengths like we have developed over decades in our aviation, energy and health-care businesses, and make them local and responsive to our customers. What do you centralize, where do you make decisions and who makes them? How do you allocate resources? How do you take advantage of the opportunities in different markets?

WSJ: How do you find the right global footprint?

Mr. Rice: Our job is to pull all of the company's interests together and make sure that's reflected in our strategy. When we think about where to put an aviation services shop, you have to look at what engines have been ordered by the airlines in the region, when they might be delivered, what are the other opportunities that might be coming up.

The biggest challenge we have is a world that needs enormous infrastructure investments. A billion and a half to two billion people lack the basics. How do their demands in basic infrastructure, electricity, power generation get built, and over what period of time? Where do we have to be situated, where do we have to have people, service shops and training facilities, to optimize that? One of the things our team is paid to do is figure out where and how this global footprint should evolve so we can get the best results for our shareholders and customers.

WSJ: You travel to up to 40 countries a year for GE. How do you keep up with GE's massive operations around the world?

Mr. Rice: It's not just me. It's a lot of people. It's about how you organize activities across multiple [businesses], and how you execute those priorities

Résumé

Education: B.A. from Hamilton College in Clinton, N.Y.

Career: Mr. Rice joined GE's financial-management program after college, and has held positions in the industrial conglomerate's appliance, corporate auditing, plastics, and energy divisions.

This copy is for your personal, non-commercial use only. Distribution and use of this material are governed by our Subscriber Agreement and by copyright law. For non-personal use or to order multiple copies, please contact Dow Jones Reprints at 1-800-843-0008 or visit www.djreprints.com.